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European Law - law - Essay Example

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It protects the spirit of competition in the common market by restricting undesirable policies, such as price fixing, market sharing, controlling output and bid rigging. Article 81(1) prohibits certain…
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European Law - law

Download file to see previous pages... This exemption is also available to agreements, which engender technical or economic progress that proves beneficial to consumers. However, these agreements should not destroy the competitive market for similar products1.
The Commission had published the Guidelines with regard to the applicability of Article 81 EC to horizontal cooperation agreements. By virtue of these Guidelines, the Commission has expanded its erstwhile perspective and relies on the market power of companies as the most suitable test in this context. In this manner, the Commission is aiming to render the prerequisites for applying Article 81(1) EC, proximate to the merger control norms. This approach seems to be unjustified from the perspective of policy decision, because it relaxes the standards set out for the relevant markets. In addition, it is also inadequate from a legal point of view, for the implementation of the provisions of Article 81(1) EC; because, the market power of companies constitutes an inappropriate test in this regard2.
In order to adopt an economics – based application of Article 81(1) EC, the Commission would be hard placed to acquire the necessary human resources, which could prove to be quite burdensome. Furthermore, Article 81 EC does not cover all agreements. It only covers agreements that restrict competition. The Commission had extended its application purview to new thresholds such as free market shares through the Notice on agreements of minor importance of 2001. This Notice deals with agreements that impose non – appreciable horizontal and vertical restrictions on competition. However, it excludes hard core restrictions. The new parameters could possibly exclude agreements between small and medium sized companies3.
Agreements, that attempt to prevent, distort or restrict competition in the common market, are in violation of Article 81(1) EC. If an agreement violates Article 81(1) EC, then it is not necessary to ...Download file to see next pagesRead More
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